Sunday, July 27, 2008

The Green Energy Revolution

With continuing high gas price and threat of stagflation, energy and economic issues has begun to top the 2008 presidential election agenda. Ten days ago on July 17th, former Vice President and 2007 Nobel Peace Prize co-recipient Al Gore gave a speech in Washington D.C. on A Generational Challenge to Repower America: “… Today I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years…”

It is comforting to see leaders like Al Gore recognize fundamental national and global problems beyond petty politics and devote to the pursuit of viable solutions relentlessly. Al Gore articulated well in his speech that accomplishing this single and easy-to-understand goal would address simultaneously all three crises we face – economic, environmental, and security. He noted that as technology advances and the prices of fossil fuel – oil, gas, coal - increase dramatically, some alternative energy sources are becoming much more competitive and attractive, thus the goal is now becoming realistic. What he is also counting on perhaps is the public sentiment for and the momentum of “Change”, echoing Barack Obama’s popular “Yes We Can”. Al Gore also repeated his call for the most significant policy change on TAX - “We should tax what we burn, not what we earn” - to replace a significant part of payroll tax by “carbon tax”. Depending on how each of us reacts and what we will do and vote for in near future, we will find out soon enough if this country will respond in force to his grand challenge.

Meanwhile, it is probably useful to examine some facts and fundamentals to convince ourselves the direction of this bold initiative makes sense. First off, energy is the most fundamental currency for human’s sustaining and gratification. At minimum, we survive and grow by taking in food and nutrients that are powered by sunlight or solar energy. Beyond survival, we all engage in all kinds of activities to better and enjoy our lives that consume varying amount of energy (and alter our environment).

The last global revolution happened over 230 years ago when James Watt’s improved steam engine allowed for a 5 folds increase of engine efficiency and inaugurated the Industrial Revolution. That and other innovations brought us to the modern society as we witnessed impressive productivity gains via mechanization (and later, automation), first by external heat engine and then internal combustion engines that is still widely used today with various types of fuels. While we continue to invent new technologies, install infrastructures, and improve various components of the systems, the reality is, from the point of view of energy, we are still living through this two centuries old industrial revolution with incremental and selective improvements. In particular, it is not an exaggeration to say 20th century has been the century of fossil fuel with oil being the single most dominant and talk-about energy source today.

There is only one small problem: there exists a finite supply of fossil fuel and it takes a very long time and rare lucks for the nature to create them. Given all that, it is intuitive that it is just a matter of time when we approach the point of exhaustion of the supply. What is not so intuitive but most critical however is not the moment when you about to run out the resource. It is the moment when the production rate (often measured by Billions of Barrels per Year) of the supply begins to decrease which happens a lot sooner than when we effectively exhaust the resource itself. This is not an easy concept to comprehend but is a proven scientific theory – the celebrated Hubbert's Peak (Oil) Theory that was first validated in 1971 when U.S oil production reached its peak and has now been used and applied globally and to some resources other than oil as well. For more details, see the excellent exposition Hubberts Peak - Impending World Shortage first published in 2001, by the Princeton Professor Emeritus Kenneth Deffeyes.

The reason we should worry about when the peak oil occurs is simple: when production rate reaches the peak and starts to decrease, you will see fundamental change of the behavior of the system and “bad” things including sharply increasing price, volatile speculations, and resulting negative chain reactions are sure to start to happen. The range of estimates by experts of the Peak Oil for global oil production varies between yesterday and 2020+. While that the exact and actual moment could be off from the predictions a few years and that there may be 10’s billions of barrels more of oil reserves here or there, one thing we do know is that the (Global) Peak Oil is going to happen in our life time for most of us; we just can’t wish it away or drill it away. Don’t let any politicians or businessmen mislead us by ignorance, short-sightedness, or alteria motives. Keep in mind that for US oil production, we passed the Peak Oil long time ago and have become critically dependent on oil imports, like it or not!

The second fundamental is a law of physics - “Conservation of Energy”. If you look at where the energy comes from and did it go with today’s technology and infrastructures, you will get quickly a pretty good idea what is going on. According to Wikipedia's World Energy Resources and Consumption, the world now consumes more than 0.5 zeta joules (i.e. 5 x 1020 J or 138,900 TWh or Trillion-Watt-hours) a year with 86% of it satisfied by fossil fuel, led by oil (0.18 zeta joules) and followed behind by gas (0.11 zeta joules) and coal (0.12 zeta joules). Excluding about 30% that was lost during generation, conversion, and delivery, about ½ of the utilized energy is being used for sustaining industrial activities from agriculture, mining, manufacturing, to construction and about 30% of it for personal and commercial transportations. All in all for U.S., the electricity consumption in 2008 is expected to be about 3.900 TWh, including the loss (to get a perspective, there are about 100 millions households in U.S. with an average household consumption in electricity alone in about 10,000+ KWh.) Considering that total U.S. energy consumption in 2008 is expected to be around 30,000 TWh (~20% of the world consumption), one can see that Al Gore’s challenge is quite modest as it represents a mere 10+ % of country’s total energy consumption. Further, electricity infrastructure is least complex so far as the social, political, and business operations are concerned; thus making it the best choice as the entry point.

Indeed this will be a great start - the beginning of the Green Energy Revolution. The significance and parallel step of “manufacture of plug-in electric cars” called for in Al Gore’s speech should not be underestimated either. Once new electric grid powered by renewable non-carbon energy sources becomes available, we can reach the bigger prizes like personal and commercial transportation (excluding air) that account for about 25% of the total energy consumption and rely on fossil fuel almost exclusively today.

21st century promises to be an exciting century. My prediction: Barack Obama will be elected President in 4 months; new energy and tax policies will be in place in 2 years, 90% of our electricity and 20% of our vehicles will be powered with renewable non-carbon energy sources by 2020. For this to happen, we must seize the moment and respond to Al Gore’s call in some fashion as complex, large scale and long term issues need to be solved by persistent political wills and efforts. If the above discussion and Al Gore’s 30 minutes speech are too serious and dry for you, you can take 5 minutes to view comedian George Colin’s satire Save the Planet. I am sure if nothing else, it shall appeal to your self-preservation nature, make you laugh and get you more interested in this challenge.

Talk to you soon!

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